December 10, 2018

AlataGas Ltd (ALA)

 AlataGas Ltd (ALA) started as a small power company operating out of Alberta in 1909.  Over the last century they have grown into one of North America’s largest electricity-generating companies.  They have roughly nine billion dollars in assets, and have recorded yearly revenues in the three billion dollar range.  AlataGas is now the largest investor-owned power generator in Canada and was actually the first such Canadian company to be traded on the New York Stock Exchange (NYSE).  AltaGas (ALA) has also made the jump into international operations when they opened power plants in the USA and Austrailia.  Alta has a very diversified set of energy interests, with divisions dedicated to natural gas extraction and transmission, coal-fired and gas-fired power generation, and other energy sources.  Their self-proclaimed business philosophy is, “That the best measures of a business’ long-term viability and value are its net income, cash flow and return on equity.  The importance of these traditional financial measures is driven by sound business fundamentals.”  This is music to the ears of experienced investors across North America.

AltaGas recently reported a decent jump in income through the first quarter of 2011.  Their quarterly statement showed just over $38 million in income before taxes, compared to $31 million in 2010.  David Cornhill, the Chairman and CEO of AltaGas (ALA) explained the rise in profits to the Globe and Mail, stating that, “We saw higher natural gas volumes in areas where producers are capitalizing on liquids-rich and solution gas, the benefit of our growing rate base and colder weather at our utilities and higher power prices and volumes.  Our overall results reflect the strength of the Corporation’s diversified portfolio of energy infrastructure assets.”  Alta also has also continued to grow its renewable energy sector.  In 2011 they continued their Forest Kerr project in British Columbia.  The project is set to go online July 2014 and BC Hydro has already signed a 60-year electricity purchase agreement with the company.  The other main focus of AltaGas (ALA) at the moment is the Gordondale Gas Plant, which the energy giant hopes will be able to capitalize on the quickly escalating natural gas market.

The Globe and Mail also reported that AltaGas has seen its share of insider action lately with multiple directors buying into serious positions within the company.  This is always an encouraging sign for investors.  With the company seeing increased profits, growing revenues in multiple sectors, and having a stable plan for expansion in place, there is no reason to believe that AltaGas (ALA) will quit rewarding its shareholders anytime soon.  Even at the relatively expensive price-to-earnings ratio of 25.27, and the company trading near its 52-week high ($27 per share), Alta is still rated a “buy” for many ratings agencies out there.  No doubt due in part to the company’s healthy 5% dividend yield.

 

AlataGas Ltd (ALA) Dividend Stock Graph:

TSE ALA

 AlataGas Ltd (ALA) Dividend Stock Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
ALAAltaGas Ltd25.165.2555.680.51-5.13-32.41

 

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